- We use Google Analytics to allow us to analyse the traffic to our
site and to review a number of statistics regarding our visitors. To do
this cookies are placed. These do not track visitors across multiple
out of being tracked by Google Analytics across all websites visit
You can block cookies altogether by activating the setting on your browser that allows you to refuse the setting of all or some cookies. However, if you do this, you may not be able to access parts of our site.
Our commitment, first and foremost, is to protecting and respecting the privacy of our clients as we understand this is important in establishing trust and confidence between us.
This policy, together with our Terms of Website Use, sets out the basis on which any personal data we collect from you, or that you provide to us, will be processed by us. Please read the following carefully to understand our views and practices regarding your personal data and how we will treat it.
For the purpose of the Data Protection Act 1998 (DPA), Absolute Return Partners LLP (ARP) is the data controller.
We gather information about you for the purpose of serving you better. We cannot do our job properly without having a comprehensive understanding of your financial objectives. The information we gather originates from a variety of sources:
- Information provided by you directly (e.g. registration forms, records of correspondence with you);
- Details of your visits to our site (e.g. traffic data, location data, weblogs and other communication data);
- Information provided by you indirectly (e.g. information provided by your custodian, tax adviser and other advisers); and
- Information that is publicly available (e.g. newspapers, the Internet, etc.).
Transmission and storage of Information
Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our site and so any transmission is at your own risk.
Once we have received your information, this information will be stored in accordance with the FCA rules and the DPA. Information is kept mostly in electronic form, but certain forms are stored in paper form as well. We will use strict procedures and security features to safeguard your personal information and do our utmost to prevent unauthorised access. Access to such information is restricted to those members of staff who are trained in the proper handling of client information.
We will not sell any information obtained about you nor will we share your personal information with our service providers. We may, however, share information with regulatory or other public authorities or other third parties if we are required to do so by law, or in order to enforce or apply our legal rights in our Terms of Website Use or otherwise. This includes exchanging information with other companies for the purposes of fraud protection and credit risk reduction. We may also share your personal information with any entity that is connected with us.
Use of Information
In order to provide services to you we will need to hold personal information about you that might be held in physical or electronic form.
We limit the use of client information to what we reasonably believe will help us to deliver a superior service, administer our business, manage our risks and comply with applicable laws and regulations.
In particular, you agree that we may process, transfer and disclose your personal information for the following purposes:
- Providing you with services which may include us making data available to our agents for the purpose of executing orders, settling any resulting transactions, holding investments and money for you or any other related purpose. You agree that this may include transmitting data to third parties including our nominees and agents who may be outside the European Economic Area should you as us to execute an order relating to an overseas investment and that this may not be subject to the same level of protection;
- Notifying you of changes to our services;
- Verifying your identity for the purpose of detecting and preventing fraud, money laundering and terrorist financing; and
- Complying with any contractual obligations, a court orders, regulatory requirements of, or requests by, the Financial Conduct Authority, HM Revenue & Customs (or any other such body or organisation).
We do not discuss any client related issues with members of the press. Occasionally, we may attend or present at industry conferences. During such events, no reference to our client relationships will be made, not even on a "no names" basis.
We will never sell or trade your personal information to third parties.
Links to other websites
Our site may, from time to time, contain links to and from the websites of our partner networks, advertisers and affiliates. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.
Access to information
The DPA gives you the right to access information held about you. Your right of access can be exercised in accordance with the DPA. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.
To ensure that content from our site is presented in the most effective manner for you and for your computer.
If you have reason to believe that our records contain inaccurate or misleading information about you, please inform us immediately.
Conflicts of Interest Policy
In accordance with our commitment and obligations to our clients, Absolute Return Partners LLP (ARP) seek to ensure that our clients are properly treated where there are or could possibly be conflicts of interest. Conflicts of interest may arise between ARP and one of its clients or between one client of ARP and another client. ARP’s failure to act in the best interests of a client may involve a material risk of damage to the interests of that client. We therefore take our responsibilities in this regard very seriously. In the following, we set out our policy for avoiding conflicts of interest.
What conflicts of interest could arise?
The nature of the financial services industry is such that conflicts of interest can sometimes develop. Generally, a conflict of interest arises where the interests of the financial services company and its associates are different from its client or clients. For example, where ARP discharges its duty to one client it might create a conflict with another client.
How are conflicts managed?
Our Conflicts of Interest Policy identifies the types of conflicts we face and the controls we have put in place to mitigate those conflicts. The policy is reviewed regularly to ensure the record of conflicts is up-to-date and relevant and the appropriate mitigating controls are in place.
ARP has implemented procedures and controls and segregations of duties. Staff are segregated operationally, such that they report to functional managers and each have distinct password protected IT access.
ARP also has specific policies and procedures on when and how employees are permitted to undertake personal account transactions, restrictions on the offering and receipt of gifts to or from clients and other businesses counterparties. We also monitor our staff’s external interests to ensure they do not conflict with their duties to ARP and its clients.
Finally, our remuneration policy is designed to ensure that remuneration structures do not create conflicts of interest between members of staff and our clients.
Any client may request a full Conflicts of Interest Policy.
Our Remuneration Policy Statement applies to all Code Staff.
Code Staff comprises categories of staff including senior management, risk takers, staff engaged in control functions and any employee receiving total remuneration that takes them into the same remuneration bracket as senior management and risk takers, whose professional activities have a material impact on the risk profile of Absolute Return Partners LLP (ARP).
ARP’s remuneration policy should be consistent with and promote effective risk management and not encourage risk taking that exceeds its level of tolerated risk.
ARP’s remuneration policy should be in line with its business strategy, objectives, values and long term interests.
ARP’s total variable remuneration should not limit its ability to strengthen its capital base.
The structure of an employee’s/partner’s remuneration should be consistent with and promote effective risk management.
ARP is a BIPRU Limited Licence Partnership and is therefore a “tier four” firm for the purposes of the FCA’s General Guidance on proportionality in relation to its Remuneration Code.
Tier four firms are permitted to dis-apply certain principles contained within the FCA’s Remuneration Code. Where ARP has elected to dis-apply certain principles this has been noted below in the relevant section of the policy.
This policy will be applied with effect from 2011.
As a tier four firm ARP has in light of its size and the nature of its activities elected to dis-apply the requirement for it to have a remuneration committee.Conflicts of Interest
ARP has documented its conflict of interest policy in its Compliance & Procedures Manual. This remuneration policy is designed to avoid conflicts of interest between ARP and its clients.
Remuneration is made up of salary and bonus for employees and partner drawings and profit distributions (in lieu of bonus) for partners.
Leverage is the ratio of the potential variable component of remuneration to the fixed component of remuneration.
As a tier four firm, ARP has elected to dis-apply the principles of the FCA’s Remuneration Code in relation to leverage and has therefore not set leverage ratios.
The factors to be used in setting bonuses are at the absolute discretion of ARP with the key factors being as follows:
- ARP's overall financial performance;
- Performance of ARP’s investment products; and
- Individual performance.
ARP will ensure that the factors to be used in setting bonuses are risk adjusted.
Deferral, Form of Delivery and Performance Adjustment
As a tier four partnership ARP has elected to dis-apply the principles of the FCA’s Remuneration Code relating to deferral, form of delivery and performance adjustment. As a result:
- ARP does not operate a deferral policy;
- All variable remuneration is delivered in cash;
- Performance adjustment is not applied.
The UK Stewardship Code
Under COBS 2.2 of the FCA Handbook, Absolute Return Partners LLP (ARP) is required to make a public disclosure in relation to the nature of our commitment to the UK Stewardship Code which was published by the Financial Reporting Council (FRC) in July 2010.
The Code aims to enhance the quality of engagement between institutional investors and companies to help improve long-term returns to shareholders and the efficient exercise of governance responsibilities. It sets out good practice on engagement with investee companies and is to be applied by firms on a "comply or explain" basis.
ARP acts either as investment manager or investment adviser to two funds that invest in global (including UK) equities:
- The Global Equity Alpha Fund
- The Vinculum Global Equity Fund
The UK Stewardship Code is thus relevant to some aspects of our business. The following principles, which we adhere to, relate specifically to the two abovementioned funds.
Institutional investors should publicly disclose their policy on how they will discharge their stewardship responsibilities. At the heart of the investment process is a desire to eliminate human error which we believe is the key to generating long-term shareholder value. We recognise that the investment process we apply is not in tune with all elements of the Code; however, the spirit of the code which promotes the creation of long-term shareholder value is an objective that we fully embrace.
Institutional investors should have a robust policy on managing conflicts of interest in relation to stewardship and this policy should be publicly disclosed. The investment approach is identical throughout the world and the average holding period is measured in years; yet conflicts of interest may still arise. Our Conflicts of Interest Policy is summarised on our website.
Institutional investors should monitor their investee companies. We never meet the companies in which we are invested; neither do we attend general meetings. This policy is a result of the investment decision process which seeks to minimise subjectivity. However, this does not imply that we do not monitor the companies in which we are invested; they are in fact monitored continuously.
Institutional investors should establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value. If the companies in which we are invested are no longer deemed of the highest economic quality, we will under normal circumstances sell when we next rebalance the portfolio. It is not part of the investment approach to engage with management for the purpose of influencing corporate strategy.
Institutional investors should be willing to act collectively with other investors where appropriate. We are in principle prepared to act collectively with other investors whenever appropriate. Having said that, the investment methodology dictates change when a company no longer meets the strict quality criteria. For that reason, we are likely to have sold our shares by the time collective action becomes relevant.
Institutional investors should have a clear policy on voting and disclosure of voting activity. The success of the investment strategy is predicated upon the ability to identify companies of the highest economic quality which are usually managed by people of the highest quality. For that reason we are usually in support of management. Having said that, since it is the objective to eliminate as much subjectivity as possible, we do not normally vote.
Institutional investors should report periodically on their stewardship and voting activities.The investment process has been communicated to all investors in our equity products. It is our policy to communicate to investors any action which may deviate from the general policy outlined in this policy document. We herewith certify that we have never used our right to vote; nor have we ever been involved in stock lending activities.
Other Disclosures (Pillar 3)
Absolute Return Partners LLP (ARP) is authorised and regulated by the Financial Conduct Authority and is categorised as a BIPRU €50,000 Limited Licence Firm for regulatory purposes. The disclosure has been prepared by ARP in accordance with BIPRU 11 and summarises the material disclosures ARP is required to make under Pillar 3 of the Capital Requirements Directive.
The management of the risks of ARP is carried out by (a) Niels Jensen who is responsible for the oversight of ARP's compliance and anti-money laundering controls and (b) Steven Bartel (COO) who is responsible for financial controls and risk management. ARP's Management Committee meets at least twice a month with all decisions being documented and all partners meet formally on an ad hoc basis.
The Management Committee receives and reviews ARP's management accounts monthly. On the basis of the management accounts it is possible to monitor and project ARP's capital resources.
ARP has a Compliance & Procedures Manual (last updated in November 2011), a compliance monitoring programme and an ICAAP process that ensures it is able to manage the risks that it faces. ARP is supported in its compliance and accounting arrangements by two independent providers.
Given the nature and activities of ARP, its risk appetite is low. It does not deal in a principal capacity and therefore does not have a trading book. The key risks that it faces are as follows:
The main market risk of ARP is foreign exchange risk as a result of its management fees being calculated in a variety of currencies whilst ARP’s operating expenditures are mostly in sterling. This risk is monitored by the COO who actively hedges the risks ARP is exposed to. Net of the hedging strategy, ARP’s exposure to market risk is thus immaterial.
Interest Rate Risk
ARP is not exposed to significant interest rate risk as it does not rely on significant borrowings to meet operating expenditure and does not make loans to clients.
The main credit risk of ARP is a defaulting debtor. As noted above, ARP does not extend credit to its clients. The key credit exposures that ARP has are management fees receivable from its clients. Cash balances are held in overnight deposit accounts and readily available.
Under Pillar 1, cash balances are risk weighted at 1.6% and management fees receivable at 8%. The partners believe that the Pillar 1 risk weight is adequate and that a Pillar 2 adjustment is not required.
The liquidity risk that ARP faces is the inability to settle its liabilities as they fall due. Part of the risk management structure noted above monitors the liquidity position of ARP at all times. Bank reconciliations and cash flows are prepared monthly to ensure that all liabilities are understood and able to be settled as they fall due.
Cash resources of ARP are maintained in accounts with instant access as noted above.
As a BIPRU €50,000 Limited Licence Firm, ARP is not subject to operational risk under Pillar 1; however, ARP is aware of the reputational damage that could result from a failure in operating procedures. ARP's key policy and procedures are documented in the Compliance & Procedures Manual and monitored via the compliance monitoring programme.
Changes to procedures are communicated to partners, employees and Appointed Representatives as they occur and, if significant, all individuals will provide a written confirmation of their understanding and acknowledgement of the changes.
Partners, employees and Appointed Representatives remain aware of the policies and procedures and periodically confirm their compliance via a semi-annual compliance declaration.
As ARP is a BIPRU €50,000 Limited Licence Firm, it has calculated its capital resources in accordance with GENPRU 2.2. ARP's capital resources are currently in excess of €635,000.
Capital Resource Requirements
ARP's Pillar 1 requirement is calculated as the higher of:
- The Base Capital Requirement (€50k);
- The sum of the Credit Risk Capital Requirement and the Market Risk Capital Requirement;
- The Fixed Overheads Requirement (3 months’ expenditures of ARP).
In the opinion of the partners, the higher of these three is always likely to be the Fixed Overheads Requirement and therefore none of the Base Capital Requirement, the Credit Risk Capital Requirement or the Market Risk Capital Requirement are material to ARP as set out above.
Pillar 1 and Pillar 2
As at the date of this report (November 2012) ARP has a surplus of capital resources over its Pillar 1 capital resources requirement.
ARP has undertaken an Internal Capital Adequacy Assessment Process (ICAAP) to determine whether it needs any further regulatory capital due to the risks it faces as set out above.
As a result of this ARP has concluded that it is sufficiently capitalised to meet its requirements under Pillar 2.